Nissan Prepares Strategy to Cut Costs in the US

Nissan plans to reduce US operating costs by rethinking the way to build vehicles, buy parts and move components and vehicles around the continent.

The automaker did not say how much it expects to save through this strategy, but the cost reductions are aimed at helping the company reach CEO Carlos Ghosn’s “Power 88″ business plan, which includes reaching a global operating profit of 8% by March 2017. To accomplish this target Nissan is taking into consideration any tiny detail such as where stamping presses are located, who performs the task of electrocoating a part and how many individual parts are shipped in a single container.

“We’re looking throughout the supply chain,” says Dan Bednarzyk, who is heading the campaign. “We’re reviewing opportunities with the suppliers — everything in the supply chain from Tier 1 to the delivery of vehicles.”

Nissan plans to increase production and market share in the US and also wants to bring new suppliers closer to plants to reduce transportation costs. Nissan’s plants in Mexico and the US are adding volume products such as the Sentra, Murano and Rogue. Dan Bednarzyk, who is heading the campaign, said that he is meeting executives from design and purchasing each week to review and implement cost-cutting ideas, most of them coming from suppliers.